Chavez’s Legacy of Ruin

March 6 (Bloomberg) -- The death of President Hugo Chavez
marks the beginning of a perilous and hopeful moment for
Venezuela and the Western Hemisphere.

There is no denying the impact of the charismatic ex-paratrooper, a plotter and survivor of coups who demolished
Venezuela’s political power structure, won three elections with
wide support and used the wealth from the world’s largest oil
reserves to advance, across the Andes and beyond, his home-brewed ideology of “Bolivarian socialism.”

How long that incoherent ideology will survive its creator
is an open question. The challenge now facing Venezuela and its
neighbors is to ensure a peaceful transition to a new elected
government. Under Venezuela’s constitution, an election must be
held within 30 days. Given the supercharged atmosphere
surrounding Chavez’s death -- just hours earlier, Vice President
Nicolas Maduro blamed Chavez’s enemies for his cancer, and
claimed that opposition groups were sabotaging the nation’s
power grid -- the potential for unrest during the campaign looms
large.

In last October’s election, Chavez used the tools of
incumbency, including not just government largesse but also
dominance of the news media and other soft authoritarian
strategies, to disadvantage his challenger Henrique Capriles
Radonski. That pattern will repeat itself, with the added
uncertainty and tension that may come from rivalries between
Maduro, National Assembly President Diosdado Cabello and others
within the post-Chavez camp.

Good Neighbors

It will fall to Venezuela’s democratic neighbors, led by
Brazil and Colombia, to exert influence for a clean and lawful
campaign. Any public pressure by the U.S. will be as ineffective
as it is unwelcome -- in the short run, Chavez’s followers are
likely to resort even more readily to anti-American invective to
whip up popular support, as Maduro did the day Chavez died by
expelling two U.S. diplomats for allegedly seeking to
destabilize the country.

The disappearance of the larger-than-life Chavez does
create more of an opening for the Organization of American
States to call, if needed, for intervention under the Inter-American Democratic Charter. It also provides an opportunity to
defeat a cynical “reform” aimed at weakening one of the
hemisphere’s human-rights monitors. Chavez, along with his ally
President Rafael Correa of Ecuador, had led an attack on the
OAS’s Inter-American Commission on Human Rights, which had
called attention to Venezuela’s authoritarian drift. In a
measure to be taken up this month in Washington, they propose to
cut funds to the judicial watchdog and particularly to its
special rapporteur for freedom of expression, who defends
liberty of the press and journalists. Some deft and forceful
diplomacy could blunt that effort, which would weaken protection
for opposition groups at a particularly bad time.

Seismic political upheaval in Venezuela, however, is
neither imminent nor desirable. Not only are 20 out of 23
governorships in the hands of Chavez supporters (many of them
former military officers), but over the course of his dozen
years in power he built up a 125,000-strong militia, of whom
30,000 could be considered armed combatants. Having them pour
out into the streets is in nobody’s best interests.

Instead, if moderate change is to come, it will be driven
largely by economic necessity. Chavez’s policies, especially his
most recent pre-election spending splurge, have led to growing
debt, among the highest borrowing costs of emerging market
countries, one of the world’s highest inflation rates, and
widespread shortages of milk, meat, toilet paper and other basic
goods. A recent devaluation will help government finances but
make imported goods even more expensive and seems like a short-term fix.

’Homegrown Charm’

Such economic tribulations didn’t seem to dim the adulation
of Chavez’s supporters, who backed him repeatedly. His likely
successors, however, may not have his “immediate friendliness
and…homegrown charm” -- qualities that Gabriel Garcia Marquez
singled out in calling Chavez “a natural storyteller.” And they
probably won’t have as much money to mix with the magical
realism. Starved of investment and milked to fund Chavez’s
special projects, Venezuela’s state-run oil company produces
one-quarter less oil than it did when he first took office.

In the days and months ahead, Chavez’s champions and
critics will debate the extent to which his policies reduced
poverty and inequality, and how accountable he should be held
for the near-quadrupling of murders from 1998 to 2011, when more
than 19,000 Venezuelans were killed (about the same as the total
for the U.S. and the European Union combined). They may plumb
the mysteries of Chavismo, including the wisdom of forging ties
with Iran and Syria and giving away billions of dollars in oil
each year to Cuba. But the luxury of mulling history’s verdict
will be denied to whoever takes Chavez’s place, because the
economic mess he left behind will demand all of his successor’s
attention.